The Indiana Court of Appeals recently handed down two decisions regarding the liability of a city or municipality for damage caused to real and personal property as the result of a sewer defect. The cases examine when a city or municipality may be held liable for sewer malfunctions that cause property damage.
In Ka v. City of Indianapolis, 952 N.E. 2d, 885 (Ind. Ct. App. 2011) the Kas sued Indianapolis (“City”) for negligence, among other torts, after the sewer line near their home became clogged, causing sewage to backup into the Kas’ basement. At trial, two experts asserted that the sewer line in question had been blocked due to structural damage that existed either since the sewer line was installed or damage that had developed over time. The court stated that the City would be liable for the subsequent property damage caused by the defect if the city knew or had reason to know of the defect. A City is only liable for defects in the City’s infrastructure if it had actual or constructive knowledge of such defects, meaning that the City could have discovered the defect by the exercise of ordinary care and diligence. In cases where the defect is hidden and not readily observable, liability will not rest with the City. In Ka, the court found that the City lacked actual or constructive notice of the damaged part of the sewer line, as the plaintiffs never had a problem with the sewer before, the City received assurances from engineers of the sewer’s structural soundness, and that the City contracted with a maintenance company to ensure the sewer’s proper use and function. As such, the court found that the City established that no genuine issue of material fact existed as to its constructive knowledge and affirmed summary judgment on behalf of the City.

Ka also involved a nuisance claim, which the court quickly dismissed. The court stated that because actions in nuisance are either to abate or enjoin an activity, summary judgment was appropriate in that case, as Kas’ claim had only premised an isolated instance and not one of continuing use of the property. Therefore, Kas were not seeking the abate or enjoin the City’s activity.

Next, in Farley v. Hammond Sanitary District, 956 N.E.2d 76 (Ind. Ct. App. 2011), residents complained of backed-up sewage in their basements after a severe storm. Hammond Sanitary District (HSD) asserted governmental immunity in its summary judgment, to which the lower court granted. The appellate court reversed summary judgment in favor of HSD, as the court found a genuine issue of material fact regarding the government’s immunity on the plaintiffs’ negligence claims. Specifically, issues of fact remained whether the flood was caused by a planning decision on how to run the sewer system, a planning function, or whether negligent maintenance was performed on the system, an operational function. Governmental immunity will exist when governmental acts are discretionary and such acts are determined to be discretionary using the “planning-operational” standard, where planning functions accord governmental actions immunity and operational functions do not. Because questions of fact existed surrounding the cause of the flood, as the facts allowed for multiple reasonable conclusions as to the element triggering governmental immunity, summary judgment was inappropriate.

As a result, cities or municipalities will not be held liable for unknown, either actually or constructively, defects or for malfunctions that are caused by a planning decision on how to run the sewer system.

Jeremy Fetty is a partner in the law firm of Parr Richey Frandsen Patterson Kruse with offices in Lebanon and Indianapolis. He often advises businesses and utilities (for profit, non-profit and cooperative) on organizational, human resources, and transactional matters and drafts and reviews commercial contracts.

The statements contained herein are matters of opinion and general information only and are not to be considered legal advice and should not be construed to form an attorney-client relationship. If you have any questions regarding this article, please contact an attorney.

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